1994 BMW 325 Problem

You need to have the cars PCM read for faults to identify where the fault lies?

FAULT INDICATION WITH SERIAL DATA TRANSFER
Transmission control unit transfers data on the fault indicator line (pin No. 29) relating to the transmission oil temperature and the selector lever coding (4th or 5th gear) to the instrument cluster. The fault light is activated by the instrument cluster when a voltage of 12 volts is applied on this line for longer than one second. This is the case when the EGS control unit is still in its initialization phase (ignition on, engine still not started), or in the emergency program or when the wire has an open (pull-up resistor in instrument cluster).

DIAGNOSTIC TROUBLE CODE MEMORY
Introduction
EGS control unit can detect 22 different defect codes with a series of additional information. It has room for 5 defect locations and their additional information in its defect code memory.
Defect Location
Here the defect text from the table of defect codes is supplemented by the corresponding pin numbers of the control unit.
Type Of Defect
Indicated here is whether the defect is an open, a short to voltage, a short to ground or a plausibility error.
Defect Currently Set
The response of the control unit to this statement can be in the affirmative, negative or conditionally affirmative or conditionally negative. In the case of a restricted reply to the question as to whether the defect code is currently set, the additional information STATEMENT NOT SURE SINCE TEST CONDITION IS NOT CURRENTLY FULFILLED appears. This means that the control unit cannot currently check the indicated defect code since, for example, the component is not active. However, the defect code was set or not set the last time the test condition was fulfilled.
Intermittent Defect
The reply to this statement is in the affirmative when the defect disappeared at least once and then reappeared. Intermittent defect codes additionally indicate how often the defect disappeared and reappeared.
Defect Detected
Here additional information is given on the operating conditions, under which the defect was detected for the first time:
Output speed.
Engine speed.
Oil temperature.
Battery voltage.
Pressure regulator current.
Selector lever position conductor L1 to L4.
Transmission.
Throttle angle, accelerator pedal position.
Kick-down active yes/no.
A/C compressor.
Engine intervention.
Solenoid valves.

Has the transmission ever been serviced in your car? Some times a trensmission that has never been serviced can have an issue within the shift body and repair or replacement of the shift body will do the most good.